In order to thoroughly implement the spirit of the Central Financial Work Conference and the Several Opinions of the State Council on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market, under the guidance of the China Securities Regulatory Commission, the Beijing Stock Exchange has formulated and revised relevant supporting business rules. Today, the Beijing Stock Exchange solicited opinions from the market on six supporting business rules, and the relevant person in charge of the Beijing Stock Exchange answered reporters' questions on the relevant situation.
1. Please introduce the overall situation of the formulation and revision of the business rules.
A: Since March 15, 2024, the China Securities Regulatory Commission (CSRC) has formulated and issued policy documents related to strengthening supervision and preventing risks and promoting the high-quality development of the capital market, and put forward a series of policy measures from the aspects of issuance access, continuous supervision of listed companies, and supervision of intermediaries. Under the overall guidance of the China Securities Regulatory Commission, the Beijing Stock Exchange has studied and evaluated the detailed implementation measures at the exchange level in accordance with the requirements put forward in the policy documents, and has improved the institutional arrangements for public offering and listing, major asset restructuring, share reduction, dividends, and delisting, and revised the relevant supporting business rules.
There are a total of 6 rules for this public consultation, namely: "Beijing Stock Exchange Public Offering and Listing Review Rules to Unspecified Qualified Investors" (hereinafter referred to as the "Public Issuance Review Rules"), "Beijing Stock Exchange Stock Listing Rules (Trial)" (hereinafter referred to as the "Listing Rules"), "Beijing Stock Exchange Listed Companies Material Assets Restructuring Review Rules" (hereinafter referred to as the "Restructuring Review Rules"), "Beijing Stock Exchange Listing Committee and M&A and Reorganization Committee Management Rules" (hereinafter referred to as the "Beijing Stock Exchange Listing Committee" and "Mergers and Acquisitions and Reorganization Committee" (hereinafter referred to as the "Beijing Stock Exchange Listing Committee" (hereinafter referred to as the "Beijing Stock Exchange Listing Committee" (hereinafter referred to as the "Beijing Stock Exchange Listing Committee" (hereinafter referred to as the "Beijing Stock Exchange Listing Committee" and "Beijing Stock Exchange Listing Committee" (hereinafter referred to as the "Beijing Stock Exchange Listing Committee" and "Mergers and Acquisitions Detailed Rules for the Administration of the Two Committees) "Guidelines for the Continuous Supervision of Listed Companies on the Beijing Stock Exchange No. 8 - Management of Share Reduction and Shareholding" (hereinafter referred to as the "Guidelines for Shareholding Reduction") and "Guidelines for the Continuous Supervision of Listed Companies on the Beijing Stock Exchange No. 10 - Equity Distribution" (hereinafter referred to as the "Guidelines for Equity Distribution"). In addition, the Beijing Stock Exchange is stepping up the formulation and revision of other supporting business rules.
In the next step, the Beijing Stock Exchange will focus on the fast handling and take the opportunity of promoting the implementation of relevant policies and measures to promote the high-quality construction of the market to a new level. After the end of this public consultation, the Beijing Stock Exchange will further improve the relevant rules according to the feedback, and release and implement them as soon as possible after fulfilling the relevant procedures.
2. In order to implement the requirements of strict supervision of the issuance and listing activities of enterprises, what optimizations and improvements have been made to the review system for stock issuance and listing on the Beijing Stock Exchange?
Answer: The China Securities Regulatory Commission clearly stated in the "Opinions on Strictly Controlling the Access to Issuance and Listing and Improving the Quality of Listed Companies from the Source (Trial)" that "strictly supervise the issuance and listing activities of enterprises, tighten and consolidate the responsibilities of all parties in the whole chain of issuance supervision, and earnestly establish the concept of being responsible to investors". In accordance with the requirements of the policy document, the Beijing Stock Exchange has revised the "Public Issuance Review Rules", "Restructuring Review Rules" and "Management Rules of the Two Committees", focusing on further consolidating the responsibilities of all parties:
The first is the reporting responsibility of the issuer. The "key minority" is required to effectively enhance the awareness of integrity, self-discipline and the rule of law, improve corporate governance and internal control systems, accept internal control audits, cooperate with intermediary verification, issuance and listing supervision, and the issuer should re-declare if it changes sponsor institutions for reasons other than the restrictions on the practice of sponsor institutions. In order to urge sponsors and issuers to pay more attention to the quality of declarations, and prevent and control "sick declarations" and "customs clearance declarations", the interval between sponsor institutions and re-declarations after two rejections within 12 months has been extended from 3 months to 6 months, and a 6-month declaration interval has been added for issuers to "withdraw after inspection" and "withdraw after supervision". The second is the "gatekeeper" responsibility of intermediaries. Sponsors are required to proceed from the interests of investors, make full use of methods such as capital flow verification, customer and supplier penetrating verification, on-site verification, etc., to prevent financial fraud, and submit working papers for regulatory reference as required. Implement the requirements of "declaration is responsible", strengthen on-site supervision, and clarify on-site supervision as one of the main means of auditing. The third is the main responsibility of the exchange. Further improve the relevant supporting mechanisms and enhance the exchange's ability to review and gatekeeping. For applications with obvious flaws in the quality of information disclosure, the Exchange will terminate the review in accordance with regulations. Implement the requirements that supervision should be "long teeth and thorns", with edges and corners, and strengthen the force of disciplinary punishments. Optimize the operating mechanism of the Listing Review Committee and the M&A and Restructuring Review Committee (hereinafter referred to as the "Two Committees"), and strengthen the management and supervision of the members of the "Two Committees" by the Exchange.
3. Please introduce the main contents and considerations of the revision of the Public Issuance Review Rules.
Answer: In accordance with the work deployment of the China Securities Regulatory Commission on strictly controlling the entry of issuance and listing and improving the quality of listed companies from the source, the Beijing Stock Exchange has revised the "Public Issuance Review Rules". In addition to the above-mentioned content related to the responsibilities of issuers and intermediaries, the following adjustments have been made in the issuance review: First, improve the relevant provisions on the positioning of the Beijing Stock Exchange. Further adhere to the positioning of the sector, clarify that the issuer should meet the positioning requirements of the Beijing Stock Exchange, and the sponsor should verify and make professional judgment. For those that do not comply with market positioning and industrial policies, the Beijing Stock Exchange may terminate the review. The second is to strengthen the supervision of information disclosure. It is clarified that the issuer shall ensure that the disclosure of relevant information accurately and truly reflects the operating ability of the enterprise. The maximum period for disaccepting disciplinary sanctions against listing application documents will be increased to 2 years for violations such as obvious flaws in the application documents that seriously affect investors' understanding or review of the application documents. Improve the information disclosure exemption requirements, require alternative disclosures, and clarify that the review agency can return response documents that do not meet the information disclosure requirements. The third is to optimize the requirements of the audit procedure. Optimize the deduction of the time limit for review by consulting industry advisory committees, etc., and clarify that the time limit deduction is also applicable to acceptance, inquiry, suspension of review, review and other links. In line with the optimization of the implementation standard for 12 consecutive months of listing, it is clarified that if an issuer suspends its review due to less than 12 consecutive months of listing before submitting it to the Listing Committee for review, the suspension period may exceed three months. In addition, the relevant expressions of the industry advisory committee, the request for instructions, and the connection of procedures in the registration stage have also been optimized.
4. What specific improvements have been made to the delisting system in the Listing Rules amendments, and what are the main considerations?
A: The delisting system is a key basic system in the capital market. Recently, the China Securities Regulatory Commission issued the "Opinions on the Strict Implementation of the Delisting System", which clearly stated that it is necessary to further deepen the reform and achieve an orderly and timely settlement pattern. The Beijing Stock Exchange resolutely implemented and revised and improved the Listing Rules in a timely manner. The current mandatory delisting system of the Beijing Stock Exchange has set four types of standards: trading, financial, regulatory and material violations, and the revision of the Listing Rules focuses on the improvement of the delisting system, revises the four categories of delisting indicators, and simultaneously adjusts the supporting information disclosure, suspension and other arrangements.
The first is the mandatory delisting of transactions. A new trading volume delisting indicator has been added, and the cumulative trading volume of less than 1 million shares for 120 consecutive trading days will be forcibly delisted. The second is the mandatory delisting of financial products. It is clarified that all financial indicators are cross-applied, that is, after the company is subject to the risk warning of compulsory delisting of financial indicators, if it touches any of the relevant financial indicators in the first fiscal year, it will be forced to delist. When determining the amount of operating income, it is required to deduct business income unrelated to the main business, and the total increase in profit in the dimension of loss is negative. In the conditions for revocation of delisting risk warning, the requirement that the internal control audit report is a standard unqualified opinion is added. The third is the mandatory delisting of the normative category. In order to severely crack down on the occupation of funds and urge enterprises to improve their internal governance, three new delisting situations have been added, including the occupation of funds by controlling shareholders, non-standard audit opinions of internal control, and disorderly competition for control. Fourth, forced delisting for major violations. In order to clear out companies that have committed large-scale fraud and have been fraudulent for many years, it is newly stipulated that if the amount of the main financial indicators disclosed by the company in any one year is more than 200 million yuan and exceeds 30% of the amount of the corresponding account disclosed in that year, or the total amount of the main financial indicators falsely recorded in the main financial indicators reaches more than 300 million yuan and exceeds 20% of the total amount of the corresponding account disclosed in the two years, or the main financial indicators have false records for three consecutive years, it will be forcibly delisted. In addition, in order to cooperate with the revision of delisting indicators, the requirements for internal control evaluation and audit reports have been added to the corporate governance section, and the disclosure requirements for performance express reports and performance forecasts have been adjusted simultaneously.
After the adjustment of the delisting system of the Beijing Stock Exchange, the overall delisting requirements are basically the same as those of the Shanghai and Shenzhen Stock Exchanges. Specifically, the standards for mandatory delisting of major violations and norms are basically the same, but there are differences in the continuous calculation time of stock transactions under the trading and financial mandatory delisting standards, the thresholds of individual indicators such as the delisting criteria for operating income, and the scope of application of market value delisting, mainly based on the adaptive adjustment of the market positioning of the Beijing Stock Exchange to serve innovative small and medium-sized enterprises.
5. Is there any transitional period after the adjustment of the delisting system?
Answer: In order to strengthen the connection between the old and the new in the implementation of the system and stabilize market expectations, in accordance with the unified arrangement of the China Securities Regulatory Commission, the relevant adjustments of the Listing Rules are proposed to set up the following transitional arrangements. First, in the mandatory delisting standards for trading, the trading volume indicator is calculated from the date of issuance and implementation of the rules. The second is the mandatory delisting standard for financial categories, with the 2024 annual report as the first applicable annual report. For companies that are subject to a financial delisting risk alert after the disclosure of the 2023 annual report and the circumstances related to the original Listing Rules, if the financial delisting criteria stipulated in the new Listing Rules are met after the disclosure of the 2024 annual report, the listing of the shares will be terminated. Third, in the normative compulsory delisting criteria, if a listed company has funds occupied by the controlling shareholder and its affiliates for non-operational purposes, and the actual controller has changed before the promulgation and implementation of the new regulations, and the current actual controller has no relationship with the capital occupier, the new regulations do not apply. For the non-standard audit opinion on internal control, 2024 is the first year of review. Fourth, among the mandatory delisting standards for major violations, if a prior notice of administrative penalty is received after the issuance and implementation of the new regulations, the new regulations shall apply. For the two cases of forced delisting of quantitative fraud, "the amount of fraud in one year reaches more than 200 million yuan, and the proportion of fraud reaches more than 30%", and "the total amount of fraud reaches more than 300 million yuan for two consecutive years, and the proportion of fraud reaches more than 20%", it is applicable to false records in 2024 and subsequent years. The mandatory delisting of "fraud for 3 consecutive years or more" is applicable to false records in 2021 and subsequent years.
6. Please introduce the main contents and considerations of the revision of the Restructuring Review Rules.
Answer: In order to implement the relevant requirements of the China Securities Regulatory Commission's "Opinions on Strengthening the Supervision of Listed Companies (Trial)", and support listed companies to enhance their investment value through standardized implementation of mergers and acquisitions, the Beijing Stock Exchange has revised the "Restructuring Review Rules". The first is to clarify the management requirements for the suitability of investors for the target of the issuance of shares. Considering the access requirements of natural person investors of 500,000 yuan on the Beijing Stock Exchange, the amendment clarifies that in the merger transaction of issuing shares to purchase assets or the merger of a listed company by exchange for shares, the shareholders of the merged company absorbed by the counterparty do not meet the suitability management requirements of investors on the Beijing Stock Exchange, and can only hold or sell the shares obtained in accordance with regulations. The second is to further clarify the requirements for the directional issuance of convertible bonds as a payment instrument. Considering that the current rules only have a principled arrangement for listed companies to issue convertible bonds to specific targets to purchase assets, this time it is further refined and clarified that listed companies can agree with specific targets on terms such as the conversion period, redemption, resale, and revision of the conversion price, so as to strengthen the operability of convertible bonds as a payment tool.
7. Please introduce the main contents and considerations of the revision of the Administrative Rules of the Two Committees.
Answer: The Beijing Stock Exchange has always attached great importance to the construction of the "two committees" team, and under the strong leadership of the China Securities Regulatory Commission and the supervision and guidance of the discipline inspection and supervision team in the China Securities Regulatory Commission, it has continued to improve the quality, efficiency and transparency of the work of the "two committees". In December 2022, the Beijing Stock Exchange revised the "Rules for the Management of the Two Committees" and completed the re-election of the "Two Committees" in February 2023. The Beijing Stock Exchange earnestly assumes the main responsibility for the direct management of the "two committees" and strictly carries out the management and supervision of the "two committees".
In order to implement the requirements of policy documents such as the China Securities Regulatory Commission's "Opinions on Strictly Controlling the Access to Issuance and Listing and Improving the Quality of Listed Companies from the Source (Trial)", "Opinions on Implementing the Standards of Politically Competent, Competent, and Style-based, and Comprehensively Strengthening the Self-Construction of the CSRC System", the Beijing Stock Exchange has effectively implemented the regulatory concept of "two strong and two strict" at the institutional level, and embodied the strict management of the cadre team, strict performance of duties, and strict accountability in the revision of the "Management Rules of the Two Committees". The first is to strengthen the requirements for the performance of duties. The newly added provisions stipulate that the committee members shall strictly implement the review standards, highlight the prevention of financial fraud and fraudulent issuance, and strictly control the entry of issuance and listing, mergers and acquisitions. The new provision provides that if an issuer is found to have violated laws and regulations such as fraudulent issuance after listing, and the relevant committee members have intentional or gross negligence in the performance of their duties, or violate the discipline of clean government, they will be held accountable for party discipline and government affairs for life. The second is to optimize the review process. The new provision provides that before the review meeting, if the participating members have questions about important audit matters, they can hold a meeting with the audit agency of the Beijing Stock Exchange and other relevant departments to discuss. Institutionalize the practice that is conducive to ensuring the independent performance of duties by members and the role of collegial deliberations, and make it clear that in the deliberation meetings of the Listing Committee and the Reorganization Committee, the participating members will express their opinions one by one and explain the reasons and basis, and the convener of the meeting will speak last. The third is to strengthen the management and supervision of committee members. Further improve the whole chain mechanism of "selection and management" of committee members, and add a new provision that the Beijing Stock Exchange will select and hire members in accordance with the criteria of strong politics, ability and work style, and strengthen the direct management responsibility of the "two committees". It is clarified that the discipline inspection department may conduct on-site supervision of the meetings of the Listing Committee and the Reorganization Committee.
8. The shareholding reduction system is related to the stable operation of the market and the vital interests of investors.
Answer: In order to implement the relevant requirements of the China Securities Regulatory Commission's "Administrative Measures for the Reduction of Shareholdings by Shareholders of Listed Companies" and the "Rules for the Management of the Company's Shares Held by Directors, Supervisors and Senior Managers of Listed Companies and Their Changes", and clarify the requirements for major shareholders, directors, supervisors and senior executives of listed companies on the Beijing Stock Exchange, the Beijing Stock Exchange has revised the "Guidelines for Shareholding Reduction", and on the basis of the overall implementation of the relevant requirements for shareholding reduction, it has made adaptive arrangements in combination with the market positioning of innovative small and medium-sized enterprises. The main optimization and adjustment contents include: First, the implementation of the requirements for preventing "detour reduction". It is added that the relevant parties continue to jointly abide by the shareholding reduction restrictions after the shareholding reduction by means of divorce, termination of legal person or unincorporated person, division, etc., and it is clarified that judicial compulsory enforcement, illegal disposal of margin financing and securities lending, and gifts continue to comply with the shareholding reduction regulations; if a major shareholder is required to reduce his or her shareholding through an agreement transfer or block transaction, the transferee shall not reduce the transferred shares within 6 months of the transfer; the major shareholder, directors, supervisors, and senior executives are prohibited from selling securities and securities lending, and the restricted shares are prohibited from being sold by securities lending. The second is to strengthen the responsibilities of actual controllers, major shareholders, and board secretaries. The actual controllers and major shareholders of listed companies are required to implement shareholding reductions in a standardized, rational and orderly manner, and pay full attention to the interests of listed companies and small and medium-sized shareholders; The third is to remove the process disclosure requirement. Delete the process disclosure requirement of more than half of the time and more than half of the plan, reduce the overlap with the disclosure of equity changes, and avoid problems such as duplicate disclosure and excessive disclosure of process information. Fourth, it stipulates restrictions on transactions during sensitive periods. The sensitive period of annual reports and semi-annual reports has been changed from 30 days to 15 days, and the sensitive period of quarterly reports, performance forecasts and performance express reports has been changed from 10 days to 5 days. Remove the restriction on the sensitive period of controlling shareholders and actual controllers.
9. What adjustments have been made to the dividend system of listed companies in the "Equity Distribution Guidelines"?
Answer: In order to implement the relevant requirements of the China Securities Regulatory Commission's "Opinions on Strengthening the Supervision of Listed Companies (Trial)", further strengthen the supervision of listed companies' dividends, and promote listed companies to enhance their investment value, the Beijing Stock Exchange has revised the "Guidelines for Equity Distribution", which has improved the regulatory requirements for cash dividends of listed companies, and encouraged listed companies to increase dividends and enhance investor returns. The first is to simplify the review process for interim dividends. The requirement for the board of directors to review the equity distribution plan at the same time when deliberating the periodic report was deleted, and the company was promoted to combine undistributed profits and pre-dividends for the current performance before the Spring Festival to facilitate multiple dividends within a year. The second is to clarify the medium-term dividend benchmark. Interim dividends are required to be based on the latest audited undistributed profits, and reasonable consideration should be given to the current profits, so as to eliminate the market's understanding of the audit requirements for interim dividend statements.
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Rules Governing the Listing of Stocks on the Beijing Stock Exchange (for Trial Implementation) (Draft for Comments)
Guidelines for the Continuous Supervision of Listed Companies on the Beijing Stock Exchange No. 8 - Share Reduction and Shareholding Management (Consultation Paper)
Guidelines for the Continuous Supervision of Listed Companies on the Beijing Stock Exchange No.10 - Distribution of Equity (Consultation Paper)
Rules for the Review of Major Asset Restructuring of Listed Companies on the Beijing Stock Exchange (Draft for Comments)
Administrative Rules for the Listing Committee and the M&A and Reorganization Committee of the Beijing Stock Exchange (Draft for Comments)
Beijing Stock Exchange Rules for Public Offering and Listing of Shares to Unspecified Qualified Investors (Draft for Comments)
责编:陈玉尧 | 审核:李震 | 监审:万军伟